A South Korean billionaire and tech entrepreneur was apprehended on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to the New York Times. The Seoul Southern District Court has issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence.
Kim stated in a recent staff meeting at Kakao that the allegations against him are unfounded, asserting, “I have never instructed or condoned any illegal acts.” The company termed his arrest as “unfortunate.”
At 58 years old, Kim is accused of manipulating the stock of SM Entertainment to obstruct Hybe, another leading K-pop agency, from acquiring it during a takeover last year.
SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually secured the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer, Bae Jae-hyun, faced indictment on similar stock manipulation charges.
Kim established Kakao in 2010, with its headquarters in Jeju City. He held roughly a 24% stake in the company, which employed over 10,000 people in 2020. At one point, Kim was South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock dipped by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this might represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s stability in the founder’s absence.